The EPO central limitation procedure has shown its potential to
disrupt infringement and validity hearings in the UK courts, after
the Court of Appeal agreed to adjourn an appeal in the ongoing
dispute between Apple and Samsung.

The Court opted to await the outcome of Samsung's
applications to the European Patent Office (EPO) to centrally limit
the claims of two of its European patents which were revoked during
the trial at the High Court, rather than press ahead and hear the
parties on the claims currently at issue.

If Samsung's central limitation applications succeed, the
claims on which Samsung's appeal is based will be deemed never
to have existed. This may force the appeal court to send the matter
back down to the court of first instance to consider afresh, thus
causing Apple the "trouble and jeopardy" of a
retrial.

This case shows how powerful a tool central limitation can be
for patent owners defending a claim or counterclaim for invalidity.
In effect, the comparatively lenient European procedure for central
limitation bypasses the more stringent UK regulations governing
amendment during trial, and offers patent owners an opportunity to
amend easily, and without the discretion of any court.

In light of this development, third parties concerned about
infringement may have even greater cause to file European
oppositions as a defensive measure, since doing so will prevent the
use of the ex partes central limitation procedure by patent owners
until the (often lengthy) opposition proceedings have been brought
to a close. Of course, stays can be granted pending the outcome of
opposition proceedings, but recent decisions (e.g. IPCom GmbH
& Co KG v HTC Europe Co Limited & Ors) suggest this is
less likely.

The facts of the case are thus. Samsung sued Apple under patents
alleged to cover the iPhones 4 and 4S, and the iPad 2 3G. The
validity of the patents, both as granted and as proposed to be
amended by Samsung, was contested in the High Court and found to be
lacking. The ensuing order for the patents to be revoked was
suspended pending an appeal by Samsung.

After the High Court decision (but before the matter had been
dealt with by the Court of Appeal), Samsung filed applications at
the EPO to amend the patents using the central limitation procedure
which, if granted, will take effect across all designated states.
According to later testimony, the applications could not have been
made sooner due to the need for coordination between multiple
ongoing parallel proceedings.

Given the "real risk" of the Court of Appeal deciding
on claims which were (possibly) soon to be defunct, Samsung then
requested adjournment of the appeal, pending the outcome of the
central limitation applications. In reply, Apple sought an order
for Samsung's leave to appeal to be set aside (thereby removing
the suspension of the revocation order) unless Samsung undertook
not to proceed with the request for central limitation. Apple
argued that Samsung's requests for amendment could have been
brought earlier, and that since their actions would effectively
lead to a retrial, they amount to an abuse of process.

Responding to Apple's request, Kitchin LJ made it clear that
there is nothing in the European Patent Convention (EPC) or UK act
which could prevent Samsung from making the applications for
central limitation when it did. Except where opposition proceedings
are pending, central limitation may take place at any time after
grant. Moreover, the EPO has no option but to examine such
applications, and the examination is limited to clarity and added
subject matter. For these reasons, applications for central
limitation are quick to resolve.

Apple cited cases (including Nokia GmbH v IPCom & Co
KG) exemplifying the principle that parties are obliged to
advance their case as early as possible and so, when it comes to
amendments, patentees should "put up in time or shut up"
to avoid abuses of process. Apple's position, based on existing
case law, was that post-trial applications to amend should
ordinarily be refused if they would require a second trial on
validity (as they suppose would be necessary here). Whilst the
cited cases relate to the more stringent UK act, Apple argued that
Samsung should not be in a better position purely by using the
EPO's central limitation process.

Ultimately, Kitchin LJ disagreed: since the Court of Appeal was
powerless to prevent Samsung exercising its right to rely on
central limitation, the fact that they filed such applications
cannot itself amount to an abuse of process. On behalf of the
court, he wrote that "we do not believe it would necessarily
amount to an abuse of process for a patentee to seek to rely upon
claims which have been limited by the EPO following a central
limitation amendment application, and that is so whether the
application has been made before or after trial".

Both the court and Samsung acknowledged that central limitation
could be used abusively (in which case one supposes that the court
would refuse a stay), but in this case the court could find no
abuse of the kind alleged by Apple. The court's written
decision stops short of defining circumstances in which the use of
central limitation could amount to an abuse, but signalled that
"all the circumstances" must be taken into account,
including probable timescales and the likelihood and implications
of a retrial, and that it may be best to determine the question on
a case-by-case basis.

The court was also keen to distinguish the present case, which
concerned the comparatively quick central limitation procedure,
from similar cases involving whether to grant a stay pending the
outcome of a comparatively slow opposition procedure.

At the time of writing, one of Samsung's central limitation
applications has been allowed, whilst the other is awaiting a reply
to objections raised by the examiner. The court was careful to make
clear that Apple will be able to "make such further
submissions (and any necessary application) about the conduct and
further progress of the action as it may consider appropriate"
when the appeal hearing resumes later this year.

Need advice?

Carpmaels & Ransford LLP is a leading firm of European
patent and trade mark attorneys based in London. For more
information about our firm and our practice, please visit our
website at
www.carpmaels.com.

This Briefing Note was first published in the IAM IP
Newsletter.

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